STARTUP-STORIES

Zoomcar partners with other companies to get more cars for their service

SUMMARY

⏺ Zoomcar is facing a shortage of car listings on its platform, despite having over 3 million users. To address this, they're offering incentives to car owners through partnerships with companies like Acko Drive and Cars24. These partnerships provide discounts on car purchases and financing options to encourage people to list their cars on Zoomcar.

⏺ Despite the listing shortage, Zoomcar is profitable and expects to reach $20 million in revenue by year-end. They hold a dominant market share in India and plan to expand into new markets in Southeast Asia, Africa, Latin America, and Central Asia.

Bengaluru, India: Car-sharing platform Zoomcar is revamping its strategy to address a key challenge: attracting more car owners to list their vehicles on the platform. This move comes amidst the company's pursuit of growth in the Indian car-sharing market.

Investing in Host Growth Strategy

"We're leveraging our current profitability to reinvest in core platform growth," explained Zoomcar CEO and co-founder Greg Moran in an interview with The Economic Times. "Our focus is on increasing both booking volume and host awareness, particularly on the host side of the marketplace."

Moran acknowledges that a lack of active vehicle listings hinders overall platform growth. "Without a growing number of active listings, we can't effectively expand the booking side and generate revenue," he stated.

Strategic Partnerships Drive Host Acquisition

Zoomcar has recently forged partnerships with various companies to incentivize car ownership and fleet expansion for potential hosts. Here are some key collaborations:

Acko Drive: This car-buying platform offers Zoomcar hosts savings of up to Rs 85,000 on new car purchases, along with financing options and expedited delivery.

Cars24: This used-car marketplace assists existing Zoomcar hosts in expanding their fleet and maximizing earnings through car sharing.

Other Partnerships: Zoomcar's collaborations extend beyond car acquisition, including partnerships with online travel portal EaseMyTrip, electric vehicle rental firm Sparkcars, and customer engagement platform CleverTap.

Addressing Vehicle Listing Undersupply

The current number of active vehicle listings on Zoomcar falls significantly short of its user base. The platform boasts over 3 million unique users, contrasting with approximately 10,000 active vehicle listings on the host side.

Profitability and Revenue Growth

Despite the supply shortage, Zoomcar has reported strong financial performance.

Host Earnings: As per the company's Q3 FY24 results, Zoomcar hosts earned roughly $4 million during the quarter.
Platform Profitability: Moran claims the platform achieved its highest global profitability level in the last quarter.
Revenue: Zoomcar's net revenue for Q3 FY24 was $2.4 million, down 19% year-on-year. However, gross profit reached a record high of $0.3 million, a significant improvement from a gross loss of $0.3 million in the same period last year.
Future Revenue Outlook: The company anticipates exceeding $20 million in revenue by the end of the year.

Market Leadership and Expansion Plans

In India, Zoomcar holds a dominant 95% market share in the car-sharing space, with major cities like Bengaluru, Delhi, and Mumbai contributing significantly. The company also operates in Indonesia and Egypt, with aspirations to expand into additional markets like Southeast Asia, Sub-Saharan Africa, Latin America, and Central Asia.

Surge in Demand Anticipated

Zoomcar anticipates a significant rise in consumer demand, particularly for longer-duration rentals related to out-of-town leisure travel during the upcoming summer vacation and cricket season. Religious tourism is also emerging as a prominent use case for Zoomcar's services in India.

By focusing on host incentives and strategic partnerships, Zoomcar seeks to bridge the supply gap and fuel its growth trajectory in the Indian car-sharing market.